Résultats 2006 et perspectives - Total.com · 20002006 2010(e) 2006 2010(e) Middle-East & Asia...

Annual Meeting

Paris, May 11, 2007

Investor Relations - www.total.com – 3C1743

Corporate Governance


Splitting the positions of Chairman of the Board and CEO

Chairman of the Board of DirectorsOrganizes and conducts the Board of Directors’ activity

Ensures communication between the Board of Directors and the shareholders, in relation with the executive management

In close coordination with the executive management, may represent the Company within the framework of its top-level relationships with government bodies and main partners of the Group

Chief Executive OfficerProposes the strategic directions to the Board of Directors

Carries operational responsibility for all Group activities withinthe framework of the strategic directions set by the Board of Directors

Chairs the Executive Committee (primary decision-making body of the Group)

Chairs the Management Committee (coordination among the divisions of the Group)

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The Board of Directors’ missions

2

Sets the strategic directions of the Group

Appoints corporate officers

Approves major investment projects

Convenes and prepares the Annual Meeting

Reviews quarterly results and approves annual accounts

Proposes the dividend and decides to pay an interim dividend

Reviews the financial and the insurance policies

Reviews current corporate affairs


Splitting the Nominating & Compensation Committee

Nominating & Governance Committee Recommends to the Board of Directors the persons that are qualified to be appointed as Directors or corporate officers

Prepares the corporate governance rules applicable to the Company and follows their application

Reviews any matter, in particular ethical issues, as directed by the Board or its Chairman

Compensation CommitteeExamines the executive compensation policies implemented in the Group and the compensation of the members of the Executive Committee

Evaluates the performance and recommends the compensation of each corporate officer

3


Current governance affairs

Director independenceCriteria adopted by the Nominating Committee in line with the 2002 AFEP-MEDEF report :

« ..has no relationship, of any nature, with the company, the Group or its management, which could compromise the independent exercise of its judgment »

11 independent directors out of 15 Board members as of February 13, 2007

All members of the Audit Committee are independent directors

Amount of share capital increases

Limitation of voting rights in the by-lawsLimitation of voting rights to 10% and 20% in case of double voting rights

Restriction aimed at avoiding a creeping takeover

No longer applicable in case of successful public tender offer

4


2006 results


Adjusted net income increased by 5% to 12.6 billion euros

Hydrocarbon production of Total in 2006

2,000

2,100

2,200

2,300

2,400

2,500

January December

Mboe/d

2.5

2.1

2.3

Globally more favorable environment in 2006 Higher hydrocarbon pricesLower refining margins Favorable market conditions for ChemicalsImpact of inflation on costs

Stronger contribution from Upstream despite 5% production decreaseGrowth and productivity programs in Downstreamand Chemicals

Business segments ROACE at 28%

Doubled investments since 2000 to 15 billion dollars in 2006

Adjusted net income is defined as net income, Group share, using replacement cost, excluding special items and excluding Total’sequity share of amortization of intangible assets related to the Sanofi-Aventis merger

5


Successful organic growth strategyContributions to

reserve potential*11 new major projects

Ichthys LNG

Tahiti

Block 32

Jubail Qatargas II

CLOV

Port Arthur coker

Jura

0

1

2

3

2005 2006

Bboe

Exploration

LNG

Heavy oil

Other3

2

1

2005 2006

Egina

Brass LNG

Ofon II

Added close to 7 billion barrels of reserve potential in 2005-2006Well- positioned and diversified portfolio

* Contribution from exploration and business development, Total share estimates, including mining6


Realigned portfolio and successfully managed major projects in 2006

Arkema share performance

25

30

35

40

18/0

5/20

06

18/0

6/20

06

18/0

7/20

06

18/0

8/20

06

18/0

9/20

06

18/1

0/20

06

18/1

1/20

06

18/1

2/20

06

18/0

1/20

07

€/share

May 06 Dec. 06

+ 30%40

35

30

25

Divested power generation assets

Increased share in Cepsa to 48.8%

Dalia start-up

Arkema spin-off

New LNG trains start-up

Swap mature onshore for deep

offshoreRestructuring

petrochemicals

Normandy hydrocracker start-up

Concentrating on high value added activities

7


Proposed dividend : 15% increase to 1.87 €/share

Dividend of Total (€)

0.951.03

1.18

1.35

1.62

1.87

2001 2002 2004 2005 20062003

+15% per year on average

Doubled dividend over 5 years

Increased pay-out ratio to 34% in 2006

Remaining 1€ per share of the 2006 dividend to be paid on May 18, 2007

2006 dividend pending approval of the May 11, 2007 Annual Meeting

8


First quarter 2007 results


Strong performance in the first quarter 2007

1Q06 1Q07 %

Adjusted net operating income from segments (B€) 3.24 2.95 -9%

Adjusted net income (B€) 3.38 2.99 -11%

Adjusted earnings per share (€) 1.45 1.31 -9%

Adjusted earnings per share* ($) 1.74 1.72 -1%

Slightly lower oil and gas prices

Higher refining margins

Negative impact of the weaker dollar on euro-denominated accounts

2.4 billion euros invested

* dollar amounts represent euro amounts converted at the average exchange rate for the period

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Exploration & Production


1.2 billion barrels discovered in 2006

Congo

United Kingdom LibyaUnited States

Angola

Nigeria

2006 exploration activity New permit 2006/2007 discovery

Pursuing sustained level of activity in 2007

10


Increasing diversification and major positioning on most of the important growth areas

Proved and probable reserves* as of end 2006 : 20.5 BboeMore than 20 years of reserve life

0.5 - 1 Bboe≥ 1 Bboe

≤ 0.5 BboeNew countries contributing to resources

Norway

Kazakhstan

Angola

VenezuelaU.A.E.

Nigeria

Canada

United Kingdom

Indonesia

Qatar

YemenCongo

China

Australia

Portfolio offering good risk-reward balance

* limited to proved and probable reserves at year-end 2006 covered by E&P contracts on fields that have been drilled and for which technical studies have demonstrated economic development in a 40 $/b Brent environment, also includes Joslyn tar sands to be developed with mining

11


2006-2010 production growth target of more than 5% per year on average

Total’s hydrocarbon production

Africa

kboe/d

2000 2006 2010(e) 2000 2006 2010(e)

Middle-East& Asia

2000 2006 2010(e)

CISEurope

2000 2006 2010(e)

North America

South America2000 2006 2010(e)

2006 baseGrowth

0

400

800

1 2001 200

800

400

2000 2006 2010(e)

Strong visibility beyond 2010 thanks to exploration successes and new LNG and heavy oil projects

estimates based on Brent at 60 $/b in 2007 and 40 $/b thereafter12


LNG : 13% growth per year on average for Total over 2006-2010

Growth of Total’s LNG production* and purchases

Mt

0

5

10

15

20

25

2005 2006 2010(e) 2015(e)0

5

10

15

20

25

2005 2006 2010(e) 2015(e)

+13% per year on average

2006 2010(e) 2015(e)

25

20

15

10

5

ProductionsLNG purchases

2005

12 projects in production in 10 countries by 2015(e)

* sales, Group share, excluding trading

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Refining & Marketing


Downstream environment globally favorable

Global demand versus refining capacity*

High refining capacity utilization rate

Robust demand in Asia

Increasing need for conversion capacity

Demand growth pulled by motor fuels

70

75

80

8590

95

100

105

1995 2005 201520051995 2015(e)70

80

90

100

Mb/d

Capacity at end-2005

Creep

ProjectsDemand

Low caseHigh case

* IEA, Total estimates

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Refining : sustained investment program…

Increasing conversion and desulphurization capacities

Successful start-up of the Normandy hydrocracker to produce more diesel

Two major projects to maximize motor fuel production in refineries

Port Arthur cokerDeep-conversion refinery in Jubail

Renewed effort to improve reliability and environment quality

Refining CAPEX*

0,0

0,5

1,0

Energy, Emissions

2000-2003

2004 2005 2006 2007-2010(e)

B$/year

1.0

0.5

GrowthValorization

Maintenance, SafetyModernization

CAPEX of approx. 1 billion euros per year on average through 2010*

* excluding capitalization of major turnarounds15


… to adapt to market changes

Total’s refineries productions* Increasing capacity by close to 10% with

the start-up of the Jubail refinery

Gasoline and distillates production

2006 2013(e)

Mt

100LPGnaphthagasoline

increasing despite the supply becoming heavier and higher in sulphur

Distillates

Heavy products

* after start-up of Jubail and including share of CEPSA (48.8%)

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Chemicals

Communication Financière


Growing contribution from rebalanced Chemicals segment to creation of value

Capital employed in Chemicals

Base chemicals(Petrochemicals – Fertilizers)

Specialty chemicals(Hutchinson – Adhesives

Resins – Atotech)

7 B€ atend 2006

Strongly integrated product chains

Increasing benefit of integrating with Upstream gas and refining

Growth concentrated in Asia and the Middle East

Steady growth driven by innovation

Strong financial performance

High-value name brands

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Petrochemicals : nearly 1 billion euros of CAPEX through 2010 to take advantage of growth in Asia

Qatar

South Korea

Developing projects to benefit from competitive resources in the Middle EastDebottlenecking Qapco cracker

Building Qatofin cracker with expected start-up in 2008(e)

Reaching critical mass in Asia through world-class sites

Major expansion of Daesan facility in South Korea

Studying integrated solutions in China

Benefit of an integrated approach Upstream / Downstream / Petrochemicals

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Outlook

Communication Financière


Sustainably fulfilling the growing energy demand in our traditional businesses

Global energy demand*

Continuing exploration effort

Extending production in mature areas

Developing resources based on high-technology : heavy oil, deep offshore, deep horizons

Valorizing major gas resources

Growing refining conversion capacity

Developing petrochemicals on growing markets

0

100

200

300

Other energies

Coal

Gas

Oil

1980 2000 2020(e)

Mboe/d

100

200

300

* source : IEA, Total estimates 19


Total’s commitment in other energies well adapted to changing balance of energy mix

Major player in European biofuels market500 kt of ETBE incorporated in gasoline*

420 kt of VOME incorporated in diesel*

Total present on the solar-photovoltaic energy chain

Manufacturing cells and solar panels

Designing solar systems

Rural electrification programs

Targeted projects in wind energy

Increased R&D efforts in biomass valorization and hydrogen technologies

Other energies*(nearly 20% of

demand in 2020)

0

25

50

Biomass

Hydro

Nuclear

Wind, solar...

1980 2000 2020(e)

Mboe/d

50

25

* 2006 data ; ETBE : Ethyl-tertio-butyl-ether ; VOME : Vegetable oil methyl ester20


Increasing Capex to fuel future growth

CAPEX by segment*approx. 16 B$ in 2007

2007(e)

Upstream

DownstreamChemicals

2006

Continuing sustained exploration programFueling production growthImproving reliability and extending the productive life of mature fieldsDeveloping petrochemicals in Asia and conversion capacity in refining

Approx. 75% of CAPEX for the Upstream segment

* excluding acquisitions21


Foundations of Total’s strategy for sustainable growth

Combining responsibilities towards all stakeholdersand value creation for shareholders

Increase diversification and internationalization of the teams

Continuing to focus on industrial safety and limiting environmental footprint of operations

Participating in the development of host countries and getting involved with local communities

Taking part in the world’s efforts to combat climate change

Fully integrating corporate social responsibilities in Total’s business model

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Disclaimer

This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business, strategy and plans of Total. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations and general economic and business conditions. Total does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the company’s financial results is provided in documents filed by the Group and its affiliates with the French Autorité des Marchés Financiers and the US Securities and Exchange Commission.

The business segment information is presented in accordance with the Group internal reporting system used by the Chief operating decision maker to measure performance and allocate resources internally. Due to their particular nature or significance, certain transactions qualified as “special items”are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, certain transactions such as restructuring costs or assets disposals, which are not considered to be representative of normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to recur within following years.

In accordance with IAS 2, the Group values inventories of crude oil and petroleum products in the financial statements in accordance with the FIFO (First in, First out) method and other inventories using the weighted-average cost method. However, in the note setting forth information by business segment, the Group continues to present the results for the Downstream segment according to the replacement cost method and those of the Chemicals segment according to the LIFO (Last in, First out) method in order to ensure the comparability of the Group’s results with those of its main competitors, notably from North America. The inventory valuation effect is the difference between the results according to the FIFO method and the results according to the replacement cost or LIFO method.

In this framework, performance measures such as adjusted operating income, adjusted net operating income and adjusted net income are defined as incomes using replacement cost, adjusted for special items and excluding Total’s equity share of the amortization of intangibles related to the Sanofi-Aventis merger. They are meant to facilitate the analysis of the financial performance and the comparison of income between periods.

Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as “resources”, “proved and probable reserves” and “future production”, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20F, File N° 1-10888, available from us at 2, place de la Coupole - La Défense 6 - 92078 Paris la Défense cedex - France. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

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Résultats 2006 et perspectives - Total.com · 20002006 2010(e) 2006 2010(e) Middle-East & Asia...

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